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HomeMy WebLinkAboutMinutes Police Pension 120717City of Palm Beach Gardens Police Officers' Pension Fund Minutes of the Meeting Held December 7, 2017 The regular meeting of the Board of Trustees of the City of Palm Beach Gardens Police Officers' Pension Fund was called to order at 9:07 AM by Jay Spencer in the Council Chambers at the Palm Beach Gardens City Hall at 10500 North Military Trail, Palm Beach Gardens, Florida. TRUSTEES PRESENT Jay Spencer, Chairman Brad Seidensticker, Secretary Allan Owens, Trustee Greg Mull, Trustee Marc Glass, Trustee OTHERS PRESENT Audrey Ross (Resource Centers) Denise McNeill (Resource Centers) Bonni Jensen (KKJ&L) John McCann (AndCo. Consulting) Steve Stack (Highland Capital) Pete Strong (GRS) via teleconference ACTUARY REPORT GRS - Presented by Pete Strong (via teleconference) Mr. Strong stated that following the last FPPTA school Mr. Spencer reached out to him regarding some of the information he received. Mr. Strong reviewed some of the methods or assumptions they should considered looking into changing. The first one is the amortization schedule regarding the unfunded liability payments. The Plan uses the percentage of pay method and now they are limited so Mr. Strong is now using the level dollar amount. He will start amortizing the Plan's unfunded liability at the level dollar vs the percentage of pay going forward. There will be no change in cost, it will just allow the Plan to pay more against the principle. MOTION: Mr. Mull made a motion to authorize the Actuary to use the level dollar method going forward when amortizing the Plan's unfunded liability payments. SECOND: Mr. Owens seconded the motion. CARRIED: The motion carried unanimously 5-0. Mr. Strong also discussed lowering the Plan's unfunded liability amortization schedule from 20 years to 15 years for all time periods. Currently the Plan has all future payments scheduled at 15 years but there are prior periods that are still at 20 years. Therefore Mr. Strong stated that he would like to lower all the time periods to 15 years in the next Valuation. This will save the Plan a lot of interest and will be eliminating about 4 years of payments as well. There will be a cost impact in doing this, but the Plan is also lowering their assumed rate of return as well so there will be a total cost impact for both changes. The Board directed Mr. Strong to reflect the Plan and the cost impacts before and after changes in the upcoming Valuation and then they will decide at that time. INVESTMENT MANAGER REPORT Highland Capital — Presented by Steve Stack Minutes 12-7-17.doc Page 1 of 4 Mr. Stack briefly reviewed the market during the quarter and noted that the equities continued to rally. They were up 6.26% for the quarter and fixed income was up slightly as well at 0.82%. Fixed income remains a difficult market as they are trying to capture more yield with less risk which is hard to find. They have shortened their duration closer to the benchmark and they are seeing more value in corporates as well. The Trustees had a lengthy discussion on municipal debt which is on the rise and maybe could ultimately benefit this portfolio. Overall Mr. Stack commented that he thinks the portfolio is positioned well going forward despite the market place. INVESTMENT CONSULTANT REPORT AndCo. Consulting — Presented by John McCann Mr. McCann stated that the Plan had a great fiscal year at 13.36% net of fees versus the benchmark at 12.74%. He commented that this was the highest return he had for the fiscal year out of all of his clients. He briefly reviewed the Plan's asset allocation and stated that they are in line with the policy and no recommendations for rebalancing at this time. He reviewed the managers and stated all have done well and we are still waiting on the International funds. Mr. McCann stated that real estate has been doing very well and the only recommendation he has is for the Board to start reinvesting their real estate dividends each quarter instead of having them paid out to the Plan. The Plan does not need the extra cash for benefit payments and could really benefit from the extra funds in the real estate. MOTION: Mr. Seidensticker made a motion to instruct American Realty to reinvest the quarterly dividends backs into the Plan. SECOND: Mr. Owens seconded the motion. CARRIED: The motion carried unanimously 5-0. ATTORNEY REPORT KKJ&L - Presented by Bonni Jensen Ms. Jensen stated that the Division of Retirement provided her with some information regarding the Chapter 185 Premium Tax money comparison by City and Company. She stated that this information does not really answer this Plan's question in regards to the decrease in money last year and therefore she is still waiting more information. Ms. Jensen reviewed the MRD for missing participants and beneficiaries that the IRS created as a safe harbor provision for trying to find people who have reached age 70 1/2 and need to take a distribution. The IRS states that all procedures need to be documented while trying to find a member. Ms. Jensen stated that the Plan's Administrator already has a procedure in place for this process as they handle the retirees benefit payments and track this information as well. Ms. Jensen reviewed her memo regarding the Federal, State & Local death benefits. She reviewed and explained all the different agencies that offer benefits and their amounts to beneficiaries if a police officer where to die prior to retirement. In addition to these benefits, this Pension Plan also has their own death benefit which Ms. Jensen stated is very strong as well. Under the pension Plan a beneficiary is entitled to the member's accrued monthly benefit, or 50% of their current salary, whatever is larger. The Trustees had a very lengthy discussion on this as it is very important to them and at this time very realistic as well. Minutes 12-7-17.doc Page 2of4 Lastly Ms. Jensen updated the Board on the Share accounts and stated that an ordinance was drafted and she will be reviewing prior to it being presented to the City Council next month. ADMINISTRATOR REPORT Resource Centers — Presented by Audrey Ross & Denise McNeill Ms. McNeill stated that she was here today to discuss the financial statement fee increase letter that was presented to the Board at their prior meeting and was tabled. She explained in great detail the reasoning for now starting to charge a fee to complete the financial statements on behalf of all their clients. Ultimately the Board is responsible for providing the Plan's auditor with the GL & TB each year and for PRC to continue these services for the Board they are proposing a $750 monthly fee due to all the time and work that goes into these financial statements each month as well as all the personal, including a CPA that prepares them. The Board can also seek an outside company to complete these statements as well, or the City may be interested in taking this back over. The Trustees had a lengthy discussion and a lot of back and forth regarding the fee amount proposed. MOTION: Mr. Seidensticker made a motion approve a $500 monthly financial statement fee effective November 1, 2017 through the end of the fiscal year, September 30, 2018. SECOND: Mr. Owens seconded the motion. CARRIED: The motion carried unanimously 5-0. MOTION: Mr. Mull made a motion to authorize the Plan's Attorney to issue a CPA RFP. SECOND: Mr. Glass seconded the motion. CARRIED: The motion carried unanimously 5-0. Ms. Ross presented the Board with the 2018 meeting dates. MINUTES MOTION: Mr. Seidensticker made a motion to approve the minutes from the September 15, 2017 regular meeting as amended. SECOND: Mr. Mull seconded the motion. CARRIED: The motion carried unanimously 5-0. DISBURSEMENTS APPROVALS MOTION: Mr. Glass made a motion to approve the disbursements. SECOND: Mr. Mull seconded the motion. CARRIED: The motion carried unanimously 5-0. BENEFIT APPROVALS MOTION: Mr. Glass made a motion to approve the benefit approval list dated December 7, 2017 as presented. SECOND: Mr. Mull seconded the motion. Minutes 12-7-17.doc Page 3 of 4 CARRIED: The motion carried unanimously 5-0. FINANCIAL STATEMENTS The board reviewed and discussed the financial statements that were provided through September 2017. The board received and filed the financial statements through September 2017. OTHER BUSINESS N/A PUBLIC COMMENTS N/A AJOURN There being no further business, the Trustees officially adjourned the meeting at 11:37PM. The next meeting is scheduled for Friday, March 23, 2018 at 9AM. Respectfully submitted, Brad Seidensticker, Secretary Minutes 12-7-17.doc Page 4of4